The White House said yesterday a US$787 billion economic stimulus plan had saved or created up to 2 million jobs, but that its impact on quarterly economic growth had slowed.
US President Barack Obama’s Council of Economic Advisors (CEA) said the bill, known as the Recovery Act, had added between 3 and 4 percentage points to GDP growth in the third quarter of last year. But it said that the plan, which was fiercely opposed by Republicans when it was passed last year, had a slightly smaller impact on economic expansion in the fourth quarter, adding between 1.5 and 3percent to economic growth.
In effect, the White House argued that without the stimulus, the economy may not have returned to growth at all after a brutal recession.
PHOTO: AFP/GETTY IMAGES
“We know that when you have fiscal stimulus it has the biggest impact of growth rates when it is first ramping up,” CEA chair Christina Romer said.
The administration is battling to restore robust economic growth as it enters a crucial political year, with unemployment at 10 percent ahead of mid-term congressional elections in November.
The CEA report said that the stimulus had raised employment by up to 2 million jobs as far as the end of last year.
“Our estimate is that as of the fourth quarter 2009, we think the Recovery Act has added between 1.5 to 2 million jobs relative to where we otherwise would have been,” Romer told reporters.
She described the Recovery Act as “the biggest, boldest stimulus in American history.
“It has done exactly what we anticipated it would do,” Romer said.
Republicans have however lashed the economic stimulus act as a costly failure and are branding Obama a “job-killing president.”
Representative Darrell Issa, the top Republican on the House Oversight and Government Reform Committee, blasted what he called the “self-serving and deceptive numbers being put out by the White House” on job creation.
“Another word for it is propaganda,” Issa said in a statement.
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